The OneAdvanced Business Trends Report, now in its ninth year, reveals 44 per cent of senior decision-makers say boosting efficiency and increasing productivity is their top priority for the coming year. However, progress is being impacted by a “perfect storm”.
“Organisations are being held back from achieving their goals by a number of factors,” says Simon Walsh, CEO of OneAdvanced, a software company headquartered in Birmingham. “The combination of skills shortages, lack of investment in technology, and disparate systems is creating significant challenges for UK businesses trying to move forward.”
The survey of more than 6,000 UK senior company decision-makers across eight industry sectors including education, government, health and care industries, found talent acquisition and retention remains the most pressing challenge for the second consecutive year. Some 16 per cent of organisations citing it as their primary concern.
Acute staffing shortages were experienced in the education, health and care sectors, with trouble attracting and retaining staff. Digital solutions can deliver repetitive and time-consuming processes such as record-keeping and filling out forms to tackle large workloads and make the sector more appealing to candidates.
Nearly two-thirds (62 per cent) of health and care providers struggled attracting and retaining staff. The legal sector struggled with the lengthy recruitment processes, with 45 per cent saying that time to hire took three to six months to replace a fee earner.
“Productivity is inextricably bound with levels of employee engagement and feeling fulfilled by their work,” the report says. It cited recent research by US-based Boston Consulting Group shows that employees with higher satisfaction demonstrate a 17 per cent increase in productivity, a 25 per cent reduction in churn rates and a 41 per cent decline in absenteeism.
Remote working positively impacts productivity
The research also explored the complex relationship between remote working and productivity. More than three-quarters of respondents say their employees are as productive or more productive when working remotely compared to office-based work. However, there’s a notable generational divide in perspectives.
Six per cent of leaders aged 55 or older believe a fully remote model will support productivity in five years’ time, compared to 17 per cent of those aged 18-24. Younger workers report lower productivity when working remotely compared to older colleagues. Twenty per cent of 18-24 year olds say they are more productive at home, compared to 32 per cent of those aged over 55.
Two-thirds of respondents were reluctant to fully commit to cloud technology, despite its crucial role in enabling artificial intelligence adoption and improving cybersecurity. Thirty-five per cent of organisations have moved entirely to cloud-based systems, a decline of 39 per cent from the previous year.
The adoption rates vary across sectors. Legal professionals are ahead, with 42 per cent using fully cloud-based technology, whilst procurement and spend professionals have a 24 per cent adoption rate.
“The combination of skills shortages, lack of investment in technology, and disparate systems is creating significant challenges for UK businesses trying to move forward.”
Simon Walsh, CEO, OneAdvanced
More than half (51 per cent) of organisations say cost is their biggest barrier to implementing new technology. Nearly one in five organisations (19 per cent) have attempted and failed to implement an AI project this year, with 48 per cent citing a lack of skills and experience as the primary reason.
Cybersecurity is ranked as the third highest challenge in 2024. Nearly one in five organisations (19 per cent) report being less or not at all prepared for a cyber attack compared to the previous year.
Despite these challenges, there are signs of optimism. Two-thirds of organisations plan to upgrade their technology stack, a collection of software systems that work together.
“If organisations are to leverage AI and other innovations to the greatest extent possible, they will have to address the digital skills gap and implement new ways of learning that embed AI and other disruptive technologies,” the report says. “Working with training and education partners – schools, FE colleges, and universities, employers can provide apprenticeship and other training opportunities based on digital processes with an emphasis on digital fluency that can help to ensure a sustainable talent pipeline for the future.”
Though AI on its own was not the answer, it could provide short-term relief.
More than one-third (36 per cent) of finance professionals say the reasons for issues with poor quality data are from limited experience with current systems, and 29 per cent blame the skills gap. Similarly, one-quarter (24 per cent) of those working in local and central government say the digital skills gap is one of the biggest challenges.
Flexibility key to unlocking productivity gains
The report indicates flexibility will be key to unlocking productivity gains. Twenty-three per cent of respondents believe that full flexibility, aligned with employee and operational needs, will be the best approach to achieve organisational goals in five years’ time.
However, there is no one-size-fits-all solution, particularly for sectors requiring frontline staff. The study found that 57 per cent of education professionals, 39 per cent of healthcare workers and 38 per cent of adult social care professionals must remain fully workplace-based.
Walsh says: “This is not time for sticking heads in the sand – transition to cloud-based systems is an absolute necessity for businesses that seek to remain competitive. Without addressing these fundamental challenges, UK organisations risk falling behind on the global stage.”
